Microsoft 365 Renewals for Not-for-profits: What Happens at Your 2026 Renewal Date  

Key Takeaways 

  • Free Microsoft 365 Business Premium (10-user grant) and Office 365 E1 grants were retired in July 2025 
  • The impact occurs at your renewal date — which is why many nonprofits are feeling it in 2026 
  • Microsoft is introducing global pricing updates (July 2026) and packaging changes (June 2026) 
  • Grace periods are tightening 
  • Nonprofit SKUs follow commercial pricing structures, with discounted rates applied 

If your nonprofit organization relies on free Microsoft 365 licenses, changes announced in July 2025 may now be affecting your organization at renewal.  

Microsoft retired several free grant-based licenses last year, but those changes apply when your subscription renews — not all at once. As a result, many nonprofits renewing in 2026 are now seeing license reductions, downgrades, or cancellations tied to those updates. 

Discounted options remain available, and some plans are still free. But renewal now requires proactive review to avoid unexpected costs or loss of access. 

1. What Changed on July 1, 2025 

Microsoft discontinued several grant-based Microsoft 365 licenses for not-for-profits. 

Ending Free Licenses: 

  • Microsoft 365 Business Premium (10-user grant) 
  • Office 365 E1 (up to 300 users) 

Still Available: 

  • Microsoft 365 Business Basic (Grant): Web and mobile Office apps, Teams, SharePoint, OneDrive (up to 300 users) 

Discounted Licenses (up to 75% off): 

  • Microsoft 365 Business Premium 
  • Office 365 E1, E3, E5 
  • Microsoft 365 E3, E5 

Timing: These changes apply at your renewal date. Microsoft does not automatically transition users to replacement licenses. If no action is taken, affected licenses may be reduced, downgraded, or canceled — requiring manual reassignment to restore access. 

2. What’s New in 2026  

In addition to the 2025 grant retirements, Microsoft is introducing broader commercial updates that affect nonprofit licensing. 

Global Pricing Adjustments (July 2026) 

Microsoft is implementing pricing updates across Microsoft 365. While nonprofit discounts (typically around 75%) remain in place, they apply to the updated base price. 

Packaging Changes (June 2026) 

Microsoft is restructuring feature inclusion across Microsoft 365 suites. Tenants will receive at least 30 days’ notice before changes take effect. 

Feature Consolidation 

Over the past year, Microsoft has added more than 1,100 features across productivity, security, AI, and IT management. Some capabilities previously sold as add-ons are now being incorporated into core suites. 

This means: 

  • Some nonprofits may gain functionality without purchasing additional add-ons 
  • Others may need to adjust licensing tiers to retain specific features 

3. Why You Should Review Your Licenses Before Renewal 

Without advance planning, renewal can result in: 

  • Loss of desktop apps or advanced security features 
  • Unexpected charges 
  • Service interruptions 
  • Administrative access issues 

Nonprofits renewing in 2026 may see users lose access immediately after renewal if licenses are not reassigned ahead of time. 

Planning ahead allows you to assess: 

  • Which licenses are actively being used 
  • Whether the Business Basic grant meets operational needs 
  • Whether security, compliance, or advanced features require discounted Premium or E3 licenses 

4. Key Licensing Strategies for Not-for-profits 

Use this renewal window to right-size your environment: 

  • Review Usage: Identify which users truly need advanced tools versus web-based access 
  • Split Licensing: Mix free and discounted licenses to align functionality with roles 
  • Assess Security Requirements: Tools like Microsoft Purview, Intune, and Defender may require higher-tier licenses 
  • Use Monthly Licenses Strategically: Monthly subscriptions provide flexibility but cost approximately 20% more. They can be useful during transition periods, but long-term planning should weigh flexibility against cost 

For example, staff who only require email and collaboration tools may be well served by Business Basic, while leadership, finance, or IT roles may require desktop apps and enhanced security features. 

5. License Optimization for Not-for-Profits: Best Practices 

To avoid overspending or losing essential functionality: 

  • Align license counts with workforce changes 
  • Remove inactive or duplicate accounts 
  • Plan upgrades early for larger user groups 
  • Regularly reassess license usage before renewal windows 

Renewal is not just an administrative step — it’s an opportunity to optimize your Microsoft 365 environment.

6. Next Steps for Not-for-Profits Renewing in 2026 

Begin your review well before your renewal date: 

  • Audit current license assignments 
  • Identify must-have apps and security features 
  • Compare nonprofit plan options and pricing 
  • Consult a licensing advisor before renewal to avoid disruption or rushed decisions 

Even a brief review ahead of renewal can prevent outages, unexpected charges, or last-minute changes. 

Partner with Experts Before You Renew 

Microsoft does not automatically protect your licensing position at renewal. 

Anders works with not-for-profits to: 

  • Evaluate license usage 
  • Identify renewal risks 
  • Align Microsoft 365 plans with operational and security needs 

Schedule a Microsoft 365 Renewal Readiness Check to confirm what will change at renewal — and ensure your technology continues to support your mission and budget. 

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